{"id":1914,"date":"2021-07-22T16:45:14","date_gmt":"2021-07-22T16:45:14","guid":{"rendered":"https:\/\/advisor.wellington-altus.ca\/thewonggroup\/?p=1914"},"modified":"2021-07-28T16:18:16","modified_gmt":"2021-07-28T16:18:16","slug":"converting-an-rrsp-to-a-rrif-2021","status":"publish","type":"post","link":"https:\/\/advisor.wellington-altus.ca\/thewonggroup\/converting-an-rrsp-to-a-rrif-2021\/","title":{"rendered":"Converting an RRSP to a RRIF 2021"},"content":{"rendered":"

Converting an RRSP to a RRIF 2021<\/h2>\n

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If you are nearing retirement, you may be starting to think about creating retirement income for yourself from your RRSPs.<\/p>\n

In this article, we address what you need to know about converting an RRSP (Registered Retirement Savings Plan) to a RRIF (Registered Retirement Income Fund), a mandatory action by the end of the year in which you turn 71 yrs old.<\/p><\/blockquote>\n

Registered Retirement Savings Plans (RRSPs) are considered accumulation vehicles. This means they are used to save for your retirement in a tax efficient way. When the time comes to start using your hard-earned savings to fund your retirement, you may want to consider moving them to a payout vehicle called a Registered Retirement Income Fund (RRIF).<\/p>\n

Much like an RRSP, a RRIF is a tax deferred account that allows your investments to grow without immediate tax implications. The purpose of a RRIF is to distribute your savings to you in your retirement years while still allowing your money to grow tax deferred.<\/p>\n

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What You Need to Know<\/h3>\n

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When to Convert Your RRSP to a RRIF<\/h4>\n

You can convert your RRSP to a RRIF at any time, but you must do so by the end of the year that you turn 71. This conversion must be done regardless of whether you need income. Once you convert your RRSP to a RRIF you must start taking scheduled income.<\/p>\n

If you are under 71 and do not require a steady stream of income, it is often beneficial to keep the funds in an RRSP. This way you can still take money out, if necessary, but the account can continue to grow without being drawn down on a regular basis.<\/p>\n

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How to Convert Your RRSP to a RRIF<\/h4>\n

It is important to convert your RRSP directly a RRIF to avoid unnecessary taxation. The process is simple but should be done with the guidance of a financial advisor to ensure the conversion is done correctly and in a timely manner.<\/p>\n